Budget in Tally Prime

What is Budget?

The budget is a financial plan that helps you estimate and allocate funds for various income and expense categories within your organization.
Budgets are essential for managing your finances effectively, monitoring performance, and ensuring that you stay within your financial limits.

Important of Budgeting in Tally

Financial Planning: It helps you plan how you'll manage your money, set goals, and decide where to spend and save.
Expense Control: Budgets prevent you from overspending by setting limits on different spending categories.
Performance Monitoring: You can compare your actual income and expenses with what you planned (the budget). This helps you see if you're meeting your financial goals or need to adjust.
Decision-Making: Budgets provide data to make smart financial decisions, such as when to invest, hire, or cut costs.

Purpose of Budget

Revenue Forecasting
Cash Flow Management
Compliance and Reporting

Example Sum

The Following Would Be Recording in Journal Using Double Entry System. Do The Posting Process from Journal Entries and Prepare The Trial Balance, Trading A/C, Profit & Loss A/C And Balance Sheet In The Books Of M/S. GREEN PARK LTD For The Following Year 2022 To 2023.

Particulars	Dr	Cr
Central Bank of India	7,00,000
Profit & Loss		5,00,000
Capital		20,00,000
Cash	13,00,000
Bank Loan		7,00,000
Land & Building	7,00,000
Plant & Machinery	2,50,000
Furniture	2,50,000
Accounts Receivable	3,00,000
Accounts Payable		3,00,000
Bank O/D		2,00,000
Good Will	2,00,000

Budget

Title of the Budget : Financial Budget

Period of Budget : 1.4.2022 to 31.3.2023

Ledger Name	Estimated Amount (Rs)
Salary	50000
Telephone Charges	20000
Wages	25000
Inward Charges	15000
Outward Charges	20000
Bad Debit	10000

Title of the Budget : Infrastructure Budget

Period of Budget : 1.4.2022 to 31.3.2023

TRANSACTION DURING THE PERIOD

Apr 01 Additional Capital Investing the Amount of Rs.500000.
Apr 03 Paid Insurance 2500.
Apr 10 Provision for Bad Debit Rs.50000 Allocate to P&L A/C.
Apr 16 Cash Deposit in Bank Rs.70000.
Apr 18 Bought on Credit From M/S. Selva Traders Rs.120000 Bill No:25 35days.
Apr 21 Withdraw from Personal Use Rs.47500.
Apr 28 Allow Interest on Capital in The Current Balance @ 6%.
May 01 Paid For: Salary: 20000, Wages: 10000.
May 11 Amount Settled To M/S. Selva Traders and Less Trade Discount @ 17%.
May 21 Purchased Furniture Rs.45000 And Computer Rs.35000.
May 28 Goods Sold To M/S. Reliance Ltd Rs.250000 Bill No:35 45days.
Jun 01 Prepaid Insurance Rs.2500.
Jun 15 Commission Received Rs.2000.
Jun 18 Interest on Drawings @ 5%.
Jun 21 Paid for Telephone Charges Rs.7500, Inward Charges Rs.10000.
Jun 29 Purchased Typewriter Rs.17500.

Ledger Name	Estimated Amount (Rs)
Furniture	75000
Typewriter	30000
Computer	90000

July 01 Paid for Rent Rs.12000, Postage Rs.8000.
July 11 Bad Debit Written Off M/S. Reliance Ltd Rs.10000.
July 21 Amount Received From M/S. Reliance Ltd Rs.240000.
July 29 The Bad Debit Amount Adjusted to Provision A/C.
Aug 01 Withdraw from Bank Rs.20000.
Aug 05 Bank Loan Settled Rs.47500.
Aug 08 Bank O/D Settled Rs.50000.
Aug 19 Purchased Furniture Rs.48500 And Typewriter Rs.12500.
Aug 21 Paid for Telephone Charges Rs.15000, Inward Charges Rs.7500, Outward
Sep 01 Purchase Plant & Machinery Rs.5000.

Opening Balance	3700000
Gross Profit	95500
Net Loss	121875
Balance sheet	4067900

Create a New Company

Go to the Gateway of Tally.
Select "Create Company" or "Alt+ K" (exact wording may vary based on your version).

Enter Company Information

Fill in the necessary information about the company:

Company Name: Enter "M/S. GREEN PARK LTD."
Mailing Name: You can use the same name or a shorter version for mailing purposes.
Address: Enter the company's address.
Country: Select the country where the company is located.
State: Choose the state.
Pincode: Enter the company's pin code.
Phone: Enter the company's contact number.
Email: Provide the company's email address.

Provide Financial Year Details:

Set the financial year details:

Books Beginning From: Select the start date of the financial year (e.g., April 1, 2022).

Save and Exit:

Save your work as needed, and when you're finished, exit Tally Prime.

Create Ledgers :

Go to Gateway of Tally:

Go back to the Gateway of Tally.

Access Accounts Info:

Select "Accounts Masters" again.

Create Ledgers:

Choose "Ledgers" and then select "Create" to create new ledgers.

Central Bank of India:

Create the ledger with the name "Central Bank of India" and group it under "Bank Accounts."
Enter the opening balance as 7,00,000 in the "Opening Balance" field.

Profit & Loss:

Create the ledger with the name "Profit & Loss" and group it under "Indirect Income."
Enter the opening balance as 5,00,000 in the "Opening Balance" field.

Capital:

Create the ledger with the name "Capital" and group it under "Capital Accounts."
Enter the opening balance as 20,00,000 in the "Opening Balance" field.

Cash:

Create the ledger with the name "Cash" and group it under "Cash-in-Hand."
Enter the opening balance as 13,00,000 in the "Opening Balance" field.

Bank Loan:

Create the ledger with the name "Bank Loan" and group it under "Secured Loans."
Enter the opening balance as 7,00,000 in the "Opening Balance" field.

Land & Building:

Create the ledger with the name "Land & Building" and group it under "Fixed Assets."
Enter the opening balance as 7,00,000 in the "Opening Balance" field.

Plant & Machinery:

Create the ledger with the name "Plant & Machinery" and group it under "Fixed Assets."
Enter the opening balance as 2,50,000 in the "Opening Balance" field.

Furniture:

Create the ledger with the name "Furniture" and group it under "Fixed Assets."
Enter the opening balance as 2,50,000 in the "Opening Balance" field.

Accounts Receivable:

Create the ledger with the name "Accounts Receivable" and group it under "Sundry Debtors."
Enter the opening balance as 3,00,000 in the "Opening Balance" field.

Accounts Payable:

Create the ledger with the name "Accounts Payable" and group it under "Sundry Creditors."
Enter the opening balance as 3,00,000 in the "Opening Balance" field.

Bank O/D:

Create the ledger with the name "Bank O/D" and group it under "Bank OD A/c."
Enter the opening balance as 2,00,000 in the "Opening Balance" field.

Goodwill:

Create the ledger with the name "Goodwill" and group it under "Intangible Assets."
Enter the opening balance as 2,00,000 in the "Opening Balance" field.

Save and Exit:

Save your work, and when you're finished, exit Tally Prime.

Select Chart of Accounts:

Under the "Display" menu, choose "Account Books" and then select "Ledgers" or "Group Summaries."

Budget Creation

Go to Gateway of Tally:

Navigate to "Gateway of Tally."

Create an Employee Group:

Go to"Create">"AccountingMasters" > "Budget" > "Create."

Enter Budget Details:

In the "Create Budget" screen:

Name of Budget: Enter "Financial Budget."
Period of Budget: Set the period from 1.4.2022 to 31.3.2023.

Specify Ledger and Group Budgets:

Enter the estimated amounts for each ledger account and group:

Salary (Under Direct Expenses): Rs. 50,000
Telephone Charges (Under Indirect Expenses): Rs. 20,000
Wages (Under Direct Expenses): Rs. 25,000
Inward Charges (Under Indirect Expenses): Rs. 15,000
Outward Charges (Under Indirect Expenses): Rs. 20,000
Bad Debit (Under Indirect Expenses): Rs. 10,000

Save the Budget:

Press Ctrl + A to save the budget.

Verify the Budget Entry:

Check the budget entry to ensure that the estimated amounts have been applied correctly.

Save and Exit:

Save your work, and when you're finished, exit Tally Prime.

follow the above steps for the budget below.

Title of the Budget : Infrastructure Budget

Period of Budget : 1.4.2022 to 31.3.2023

Ledger Name	Estimated Amount (Rs)
Furniture	75000
Typewriter	30000
Computer	90000

TRANSACTION DURING THE PERIOD

Apr 01 Additional Capital Investing the Amount of Rs.500000.

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Accounting Vouchers:

From the Gateway of Tally, go to "Transaction" or press V to directly access Vouchers.

Select Journal Voucher:

Choose "F7: Journal" to create a Journal Voucher.

Enter Voucher Details:

In the Journal Voucher screen:

Date: Set the date to April 01.
Particulars:

In the Debit column:

Account: Select or create the ledger for "Investment.
Amount: Enter Rs. 500,000.

In the Credit column:

Account: Select or create the ledger for "Capital."
Amount: Enter Rs. 500,000.

Narration: Enter a brief description, such as "Additional capital investment."

Debit and Credit Accounts:

Debit the account representing the investment (e.g., "Investment") with Rs. 500,000.
Credit the account representing the capital (e.g., "Capital") with Rs. 500,000.

Save the Voucher:

Press Ctrl + A to save the Payment Voucher.

follow the above steps for the budget below.

Apr 10 Provision for Bad Debit Rs.50000 Allocate to P&L A/C.
Apr 28 Allow Interest on Capital In The Current Balance @ 6%.
Jun 01 Prepaid Insurance Rs.2500.
Jun 18 Interest on Drawings @ 5%.
July 11 Bad Debit Written Off M/S. Reliance Ltd Rs.10000.
July 29 The Bad Debit Amount Adjusted to Provision A/C.

Apr 03 Paid Insurance 2500.

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Accounting Vouchers:

From the Gateway of Tally, go to "Transaction" or press V to directly access Vouchers.

Select Payment Voucher:

Choose "F5: Payment" to create a Payment Voucher.

Enter Voucher Details:

In the Payment Voucher screen:

Date: Set the date to April 03.
Party's A/c Name: Select or create the ledger for "Insurance."
Under: Choose the appropriate group for the insurance payment (e.g., "Indirect Expenses").
Amount: Enter Rs. 2500.
Credit Account: Select or create the ledger for "Cash."
Narration: Enter a brief description, such as "Paid insurance."

Debit and Credit Accounts:

Debit the account representing the expense (e.g., "Insurance") with Rs. 2500.
Credit the account representing the payment method (e.g., "Cash") with Rs. 2500.

Save the Voucher:

Press Ctrl + A to save the Payment Voucher.

follow the above steps for the budget below.

Apr 21 Withdraw from Personal Use Rs.47500.
May 01 Paid For: Salary: 20000, Wages: 10000.
May 11 Amount Settled To M/S. Selva Traders and Less Trade Discount @ 17%.
May 21 Purchased Furniture Rs.45000 And Computer Rs.35000.
Jun 21 Paid for Telephone Charges Rs.7500, Inward Charges Rs.10000.
Jun 29 Purchased Typewriter Rs.17500.
July 01 Paid for Rent Rs.12000, Postage Rs.8000.
Aug 05 Bank Loan Settled Rs.47500.
Aug 19 Purchased Furniture Rs.48500 And Typewriter Rs.12500.
Aug 21 Paid for Telephone Charges Rs.15000, Inward Charges Rs.7500, Outward Charges Rs.5000, Postage Rs.27500, Fright Charges Rs.7000.
Sep 01 Purchase Plant & Machinery Rs.5000.

Apr 16 Cash Deposit in Bank Rs.70000.

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Accounting Vouchers:

From the Gateway of Tally, go to "Transaction" or press V to directly access Vouchers.

Select Contra Voucher:

Choose "F4: Contra" to create a Contra Voucher.

Enter Voucher Details:

In the Contra Voucher screen:

Date: Set the date to April 16.
Credit: Select or create the ledger for "Central Bank of India"
Debit: Select or create the ledger for "Cash."
Amount: Enter Rs. 70,000.
Narration: Enter a brief description, such as "Cash deposit in the bank."

Debit and Credit Accounts:

Debit the account representing the cash (e.g., "Cash") with Rs. 70,000.
Credit the account representing the bank (e.g., "Central Bank of India") with Rs. 70,000.

Save the Voucher:

Press Ctrl + A to save the Payment Voucher.

follow the above steps for the budget below.

Aug 01 Withdraw from Bank Rs.20000.
Aug 08 Bank O/D Settled Rs.50000.

Apr 18 Bought on Credit From M/S. Selva Traders Rs.120000 Bill No:25 35days.

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Accounting Vouchers:

From the Gateway of Tally, go to "Transaction" or press V to directly access Vouchers.

Select Purchase Voucher:

Choose "F9: Purchase" to create a Purchase Voucher.

Enter Voucher Details:

In the Purchase Voucher screen:

Date: Set the date to April 18.
Supplier Invoice No: Enter "25" as the bill number.
Credit Period: Enter "35" days.
Particulars:

In the Debit column:

Account: Select or create the ledger for "Purchase.
Amount: Enter Rs. 120,000.

In the Credit column:

Account: Select or create the ledger for "M/S. Selva Traders."

Narration: Enter a brief description, such as "Purchase on credit from M/S. Selva Traders."

Debit and Credit Accounts:

Debit the account representing the purchase (e.g., "Purchase") with Rs. 120,000.
Credit the account representing the supplier (e.g., "M/S. Selva Traders").

Save the Voucher:

Press Ctrl + A to save the Payment Voucher.

May 28 Goods Sold To M/S. Reliance Ltd Rs.250000 Bill No:35 45days.

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Accounting Vouchers:

From the Gateway of Tally, go to "Transaction" or press V to directly access Vouchers.

Select Sales Voucher:

Choose "F8: Sales" to create a Sales Voucher.

Enter Voucher Details:

In the Sales Voucher screen:

Date: Set the date to May 28.
Buyer's Order No: Enter "35" as the bill number.
Credit Period: Enter "45" days.
Particulars:

In the Debit column:

Account: Select or create the ledger for "M/S. Reliance Ltd."
Amount: Enter Rs. 250,000.

In the Credit column:

Account: Select or create the ledger for "Sales."

Debit and Credit Accounts:

Debit the account representing the buyer (e.g., "M/S. Reliance Ltd") with Rs. 250,000.
Credit the account representing the sales (e.g., "Sales").

Save the Voucher:

Press Ctrl + A to save the Payment Voucher.

Jun 15 Commission Received Rs.2000.

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Accounting Vouchers:

From the Gateway of Tally, go to "Transaction" or press V to directly access Vouchers.

Select Receipt Voucher:

Choose "F6: Receipt" to create a Receipt Voucher.

Enter Voucher Details:

In the Receipt Voucher screen:

Date: Set the date to June 15.
Mode of Payment: Choose the appropriate mode of payment (e.g., "Cash").
Particulars:

In the Debit column:

Account: Select or create the ledger for "Cash"
Amount: Enter Rs. 2000.

In the Credit column:

Account: Select or create the ledger for "Commission Received."

Debit and Credit Accounts:

Debit the account representing the mode of payment (e.g., "Cash") with Rs. 2000.
Credit the account representing the commission received (e.g., "Commission Received").

Save the Voucher:

Press Ctrl + A to save the Payment Voucher.

Profit and Loss

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Reports:

From the Gateway of Tally, go to "Reports" by selecting it from the main menu.

Financial Reports:

Under "Reports," navigate to "Profit & Loss" in the "Financial Reports" section.

Balance Sheets

Go to Gateway of Tally:

You'll start at the Gateway of Tally, which is the main screen.

Access Reports:

From the Gateway of Tally, go to "Reports" by selecting it from the main menu.

Financial Reports:

Under "Reports," navigate to "Balance Sheet" in the "Financial Reports" section.

View Budget Reports:

After creating and entering the budget data, you can view budget reports.
Go to Gateway of Tally >Display More Reports >Trial Balance > Budgets Leger -wise.

Select Budget Name:

Choose the budget name for which you want to view the report.

View Budget Reports:

Tally Prime provides various budget reports, such as Budget Variance, Budget Comparison, etc.
You can explore these reports to analyse how your actual expenses compare to the budgeted amounts.